Liz Booth interviews Tony Hobrow, chief executive of the Whittington Group, and a man who knows the importance of bouncing back.
It is difficult not to sound smug when you are running a cash-rich company from a low tax domicile, making money while others are struggling through tough times.
But Tony Hobrow is a born optimist, a man who has bounced back several times through his career. He is only too familiar with going home to his wife to announce that he is unemployed and not knowing what is coming next.
Hobrow never meant to work in insurance, setting out with Price Waterhouse (as it was then) to train as a chartered accountant. When he was qualifying he audited the books for Lownes Lambert and was offered a job. He didn’t take it up but it wasn’t long before another came along – this time with the English & American Group (E&A) which was setting up in Gloucester – and what started out as a two-year stint turned into a decade. Hobrow eventually headed up Trinity Square Services (TSS).
TSS was sold when English American Insurance went bust, and Hobrow found himself in a windowless office with Chris Keeling, the managing director of E&A, two desks and a telephone. In the new office Keeling was chairman; Hobrow MD. TSS had become part of the Murray Lawrence Group and was renamed under the Whittington Group banner. Hobrow’s job was to set up an insurance services division to include run-off administration for Lloyd’s syndicates and insurance companies, insurance consultancy and corporate management for “live” underwriting entities. This division traded under the Whittington Group banner.
Within 18 months, Whittington had acquired 13 businesses, 400 people and $10bn of business. “Scary but exhilarating,” is how he remembers those days. “We were in the right place at the right time.”
Hobrow seems to have led a fairly charmed life, building up successful businesses and developing in new directions at just the right moment, spotting opportunities and making the most of them.
Whittington and the Netherlands-based Omni each put in £100 of capital to develop political risk collections. “In the end we did all the Equitas political risk business which, in effect, was the beginning of Omni Whittington.”
But not everything has always been as rosy. In July 1997 he was appointed group managing director of Murray Lawrence Holdings and was closely involved with raising substantial new capital. As a result, Murray Lawrence merged with Angerstein Underwriting Trust plc to form Amlin plc in 1998.
Hobrow lasted for two of Amlin’s board meetings before he once again headed home to announce he had no job and was not sure what would come next. “This was a case of being the wrong man in the wrong place at the wrong time.”
Although Whittington was still in the back of his mind, Hobrow became chief executive of the newly-formed London Market Association. Robert Hiscox was chairman and Hobrow fondly remembers their “robust relationship”, glad that Hiscox had finally got his name right by the time Hobrow left.
In the meantime, Hobrow was again talking to Omni about the Amlin-owned Whittington
business. A successful bid resulted in the rebirth of Omni Whittington, which Hobrow continued to develop until 2005.
At that point, he says, it was difficult for a private company to continue funding the operation. “We wanted to buy businesses in run-off, but we did not have enough money.”
An “amicable and strategic split” followed as Hobrow found two private equity houses in Hong Kong to back the Whittington business. “We had a fledging business in Singapore and I saw Asia as a place to expand.”
He has been chief executive from day one and now spends 90% of his time in the region, mostly in Singapore. He has travelled a lot in the first two years, setting up the business and establishing some strategic direction.
It cost him dear on the personal front with a split from his wife of 26 years. He has recently remarried and, just a few months in, is clearly contented.
Like the man, the business has emerged with a clear strategy for the future. There are three elements, he says. First, operating from the Lloyd’s platform, Whittington offers a range of services to start-ups, which Hobrow says, if successful, can then lead to managing agency services or other outsourced options. Because of the volume of work involved, managing two such ventures a year is about right – and there are plenty in the pipeline.
On the run-off side, Hobrow has not seen too much activity. “The last decent run-off book was Union America which attracted a huge number of bidders. It was sold at a price we were never going to pay.” Fierce competition has squeezed margins and he says the London run-off arena still “has a lot of mouths to feed”, which is one of the reasons behind his decision to “move away and build in different directions”. He believes Whittington is in a fairly unique place, offering “business angel services to the insurance market”.
Second, it has a small portfolio of private equity style deals, helping businesses become established with the aim of exiting three to five years along the line.
That could be a flaw in the plan, however. While Hobrow is convinced the markets will bounce back, there may not be enough investors around in those three to five years to buy the businesses.
This is where the third element comes in – something Hobrow is extremely cagey about except to say that he is planning an “innovative” insurance business in Asia which should be launched early next year.
Hobrow counts his firm lucky. As a cash-rich company, it is in a good position not only to ride out the storm but to profit from opportunities. “There are businesses, assets and people who would not have been available at other times – and they are available at a good price,” he says. Whittington will be taking advantage by acquiring both assets and new staff.
Hobrow has settled to his new life in Singapore and is delighted at the prospect of a busy year ahead. He is more than happy to have left living in London behind him, not least because of the tax burden. Being an outsider has given him “a helicopter vision” of what is happening here, he says.
He keeps coming back to George Bernard Shaw’s view that “History has taught us nothing except history teaches nothing”. And that alone gives him confidence that global economies will bounce back.
Liz Booth is a freelance journalist